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This is how SMEs can manage business rates bills

Despite the government’s Small Business Rate Relief scheme, business rates are being increasingly blamed for pushing companies to the brink and beyond. Alternative finance can help SMEs manage these bills.

According to new research from Colliers International, higher business rates are strangling the British high-street and helping create conditions last seen a decade ago during the economic crash of 2008-09. The global commercial real estate agency and consultancy argues that the hike in business rates has contributed to the decline or demise of 16 prominent high-street businesses since April 2017, including Warren Evans, Carpet Right, Jamie’s Italian, East, Toy R Us, New Look, Feather & Black, Maplin, Byron and Jaeger.

Adding fuel to the fire is bad news from popular booksellers Foyles. It has reported poor results for 2017 and it has blamed its slide into the red, partly at least, on increased business rates. Foyles is a London-centric business and while businesses in the capital aren’t the only ones under pressure as a result of business rates reform, these companies have been particularly hard hit. According to the Federation of Small Businesses (FSB), London pays a third of the country’s total business rates bill, at £8.2 billion.

In the meantime, the government are pointing towards its Small Business Rate Relief scheme and saying that more and more small companies will see the burden ease. However, the findings from Colliers and the comments from Foyles raise doubts over whether the government is acting with enough urgency. The next review of business rates isn’t scheduled until 2021. Indeed, such is the concern surrounding the issue that communities secretary Sajid Javid has announced a fresh review of the business rates system.

So, how can manage business rate bills and the many other policy and non-policy related costs at a time of market uncertainty? Alternative finance has a role to play. Access to finance is vital to safeguarding cash flow and to driving business development and growth, and in the wake of prolonged caution from traditional lenders, services such as invoice finance, peer-to-peer lending and crowdfunding are coming to the fore.

With awareness growing of the accessibility, affordability and flexibility of these services, more and more small business owners are using them. For example, this is how an SME in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to finance the purchase of new equipment.

It’s fair to say that so far business rates reform has been a rough ride for everybody involved, not least the small business owners that have been hit with larger bills. Relief may be on its way. It may not. Regardless, managing these bills and others is vital to maintaining forward momentum, and alternative finance can help SMEs achieve this.

To find out more about A&T Business Associates services, contact Tony on 01903 602211 or tony@atbusinessassociates.co.uk.

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